Barclays to slash investment jobs

Barclays is set to cut 100 investment banker positions worldwide due to the stagnation of stock market deals. A report by EY revealed that in the first quarter of 2023, companies in London only raised £81m, a decrease of 80% compared to the same period in the previous year, where £400m was raised. During the same period, two IPOs on London’s main market raised £63m, while the three floats on AIM brought in £18m.

The slowdown in deal-making was attributed to factors such as the uncertain geopolitical climate and the inflation spike. The decision by Barclays to reduce its workforce is similar to that of Citi, Goldman Sachs, and Morgan Stanley, which have eliminated thousands of jobs this year. In 2022, Barclays recorded a profit of £5bn, 19% lower than the previous year’s £6.2bn. In the final quarter of 2022, the return on equity in its international unit, which includes the investment bank arm, was just 6.4%, a decrease from 14.4% to 10.2% in 2022.

The decline in deal-making has been experienced globally, with only 299 IPOs in the first quarter of 2023 raising £17.3bn, representing a 61% decrease compared to the previous year. This trend has resulted in banks reducing their workforces to cut costs. The reduction in the number of investment banker positions is seen as a strategic move to manage costs amidst the declining revenue.

The reduction in revenue experienced by Barclays, like other banks, is as a result of the challenging market environment that has resulted in a decrease in deal-making. Although the trend is not unique to Barclays, the reduction in revenue prompted the bank’s decision to cut 100 investment banker positions worldwide. This move is expected to help manage the bank’s costs, which has been affected by the sluggish market.